The Big Mac, long a symbol of globalisation, has become the latest victim of this tiny island nation's overexposure to the world financial crisis.

Iceland's three McDonald's restaurants - all in the capital Reykjavik - will close on October 31, as the franchise owner gives in to falling profits caused by the collapse in the Icelandic krona.

"The economic situation has just made it too expensive for us," Magnus Ogmundsson, the managing director of Lyst, McDonald's franchise holder in Iceland, told The Associated Press on Monday.

Lyst was bound by McDonald's requirement that it import all the goods required for its restaurants - from packaging to meat and cheeses - from Germany.

Rising costs

Costs had doubled over the past year because of the fall in the krona currency and high import tariffs on imported goods, Ogmundsson said, making it impossible for the company to raise prices further and remain competitive with competitors that use locally sourced produce.